News Corp. buoyed by strong profits after scandal
Media behemoth News Corp. posted strong profits Wednesday, boosting owner Rupert Murdoch's attempts to reassure investors after a damaging phone-hacking scandal in Britain.
Although net income for the fourth fiscal quarter fell 22% to $683 million for the fourth quarter, News Corp. finished the year with profits amounting to $2.74 billion, a rise of 7.9% compared to 2010.
News Corp, which owns the Fox TV network and The Wall Street Journal in addition to a host of worldwide newspaper, Internet, broadcast and cable television interests, is grappling with the biggest crisis in its history.
A phone-hacking scandal in Britain has mushroomed into a full-blown public relations nightmare for the media and entertainment colossus headed by 80-year-old chief executive Murdoch.
"While it has been a good quarter from a financial point of view, our company has faced challenges in recent weeks relating to our London tabloid, News of the World," Murdoch said in a press release accompanying Wednesday's results.
"We are acting decisively in the matter and will do whatever is necessary to prevent something like this from ever occurring again."
The media titan made it clear during his grilling by a British parliamentary committee last month that he had no plans to step aside.
During the tumultuous quarter, News Corp. closed the 168-year-old News of the World and abandoned its bid for full control of British pay television giant BSkyB.
The quarter also saw the resignations of trusted Murdoch aides Rebekah Brooks, a former News of the World editor, and Les Hinton, chief executive of News Corp.'s Dow Jones unit, which publishes The Wall Street Journal.
Brooks was editor of the News of the World from 2000-2003, when reporters at the newspaper allegedly hacked the phone of murdered teenager Milly Dowler -- the claim that sparked the crisis and led to the closure of the tabloid.
Hinton, who served as chairman of News International, the News of the World parent, from 1995 to 2007, worked alongside Rupert Murdoch for more than five decades dating back to his start in the newspaper business in Australia.
News Corp. also sold Myspace, the social network which it bought in 2005 for $580 million, during the quarter for a paltry $35 million, bringing the curtain down on Murdoch's tie-up with the one-time social networking star.
News Corp. shares have lost more than 20 percent of their value since the first reports in early July that phone-hacking victims in Britain included the slain teenager Milly Dowler.
News Corp. stock inched up slightly to $13.80 per share in trading that followed release of the earnings results.
(c) 2011 AFP